Current media coverage and upcoming developments hand-picked from the industry.

Relocations to the Rescue New-to-market tenants could fill empty office spaces

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SOUTH FLORIDA BUSINESS JOURNAL – JULY 8, 2021 BY BRIAN BANDELL There’s little doubt that Covid-19 cast a blow to office markets nationwide. But unlike other regions, a spate of business relocations could be the lifeline South Florida’s office sector needs to bounce back strong.

In most U.S. metropolitan areas, office has been a dicey investment prospect, as experts fret over how much remote work will impact existing occupancy. South Florida isn’t immune to that concern. But some industry insiders are bullish on the region’s office market as companies, especially those in technology and financial services, flock to the region in record numbers.

The big question is whether these moves will make up for the hits to the office market during the pandemic. If so, this could lead to developers spending hundreds of millions of dollars on office construction and renovations to capture premier tenants.

Office occupancy declined throughout the tri-county region during Covid-19 as companies closed and downsized, and leasing activity stalled for much of 2020. Even at the end of the first quarter of 2021, the office vacancy rates remained significantly higher than they were 12 months earlier, according to statistics from both JLL and Colliers.

Vacancy rates will fall, as the amount of deals in the pipeline from relocations is the biggest he’s witnessed during his career, said Stephen Rutchik, executive managing director of the office sector for Colliers in South Florida. Some of those companies leased space on Miami’s Brickell Avenue in the $80s per square foot, whereas 2020’s top rents were in the $60s, he said. That’s high for South Florida, but much less expensive than New York or Boston.

“The number of financial service firms and family offices coming from the Northeast and West Coast is driving the bulk of our daily activity,” Rutchik said. “The leading indicator is the residential market. We see many of the big names out there buying houses here, and we see them the same week or the next week touring the market for office space.”

With Covid-19 vaccines widely available, more companies are bringing workers back to their offices. However, not all businesses will need as much space because more employees will work remotely.

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After Four Decades, Stephen Bittel’s Terranova Has Mastered Navigating Down-Business Cycles

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TYCOON STORY — JULY 1, 2021 While the cause of an economic cycle to this day is still a hotly debated topic amongst economists, the one thing that can be agreed upon is the economy experiences periods of growth and recession in a cyclical nature. This cycle has been broken down into four distinct phases: expansion, peak, contraction and trough. During expansion, there is increased employment, economic growth and upward pressure on prices, which eventually comes to the highest point of the business cycle known as the peak. After a peak, the economy typically contracts, entering into a correction during which growth slows, employment declines, and pricing pressures subside. The trough is the point at which the economy has hit a bottom, and is the point from which the cycle starts itself over again.

At the heart of every entrepreneur’s aspiration for their business is longevity. Few people start a company without the intention of watching it evolve over the years, surmounting obstacles and growing to celebrate the years in business and eventually decades. However, in order for any entrepreneur to have their business not only survive but also thrive, they must be aware of the inevitability of business cycles and be able to effectively navigate them.

Stephen Bittel, founder and chairman of Terranova Corporation, has managed to master such navigation tactics. Terranova is currently in its 41st year of business and has grown from Bittel’s home office to become one of the top commercial real estate companies in Southern Florida. In that time, the company has made its way through six recessions including the one that is currently ongoing as a result of the coronavirus pandemic, and thanks in part to Bittel’s leadership has come out of each one stronger than before. Below, we explore how the business has handled some of the major recessions and what Bittel believes is the right course of action for doing so.

Born and raised in Miami, Bittel was a product of the Miami-Dade County public school system, attending from first grade through to his senior year of high school. Seeking experiences vastly different from what he had grown up with, Bittel decided to attend university in Maine at the highly selective liberal arts school Bowdoin College. A fish out of water, although he initially felt overwhelmed by the demand for academic rigor of a private university in comparison to his public school education, he was eventually able to adapt to the school’s demands and graduated magna cum laude from the university in 1978 with a degree in economics. During his final year at the college, Bittel was awarded the Thomas J. Watson Fellowship, a grant that enables graduating seniors to pursue a year of independent study outside the United States.

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Remote work is losing its luster, and employers are calling people back to the office

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SUN SENTINEL — JUNE 28, 2021 By DAVID LYONS After months of keeping employees at home to dodge COVID-19, companies in South Florida are concluding that the best place for most of their workers is back at the office.

The pandemic proved that people don’t need to sit in the office full time, but many South Florida employers are bringing people back on at least flexible schedules, shattering the illusion of a worplace revolution that leaves most people signing on from home.

“Nobody has that full crystal ball,” said Jenni Morejon, president and CEO of the Fort Lauderdale’s Downtown Development Authority. “Human beings are creatures of habit, and the notion that people will never go back to the office – that is probably a lot of hypo and hysteria.”

She believes the real questions is the degree to which workers are burned out “from remote working full time.”

A national survey of 185 companies by CBRE, a real estate service firm, suggests that managements now see the office as a better means of supporting collaborative work than relying on remote communications.

The firm’s Spring 2021 Occupier Survey found 41% of companies interviewed intend to return to steady office use in the third quarter this year, while 20% are targeting the fourth quarter. Another 23% said their workers have already returned to their places of employment.

“Multiple factors support this sentiment, including the ongoing rebound of the U.S. economy and companies’ realization that they need to retain more office space than they previously thought,” said Julie Whelan, CBRE’s head of occupier research.

Some observers think companies have no choice but to recall most workers because clients are restless about the services they’re receiving.”The biggest user of office space in South Florida tends to be banks, investment shops, wealth management companies, law firms and real estate companies,” said Stephen Bittel, chairman of the real estate services firm Terranova. “We tend not to have large corporate users here. Those service firms had businesses that are well designed to work from home.”

“They congratulated themselves” for cutting expenses through remote work, he said, but the cuts may have boomeranged for some.

“They have spent no money on travel and client entertainment and have not replaced employees and support staff,” Bittel said. “They think they’be bottled lightning for moment. The flip side is that clients and customers are screaming about the incredibly slow pace and transactions getting completed.

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